Brass Sheet and Strip From Canada: Final Results of Antidumping Duty Administrative Review and Notice of Intent Not To Revoke Order in Part

DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-601]

Brass Sheet and Strip From Canada: Final Results of Antidumping

Duty Administrative Review and Notice of Intent Not To Revoke Order in

Part

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of Final Results of Antidumping Duty Administrative

Review and Notice of Intent Not to Revoke Order in Part.

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SUMMARY: In response to a request by the respondent, the Department of

Commerce (the Department) has conducted an administrative review of the

antidumping duty order on brass sheet and strip (BSS) from Canada. The

review covers one manufacturer/exporter of this merchandise to the

United States, Wolverine Tube (Canada), Inc. (Wolverine). The period

covered is January 1, 1997 through December 31, 1997.

Upon consideration of the data on the record of this review, and of

the case briefs and rebuttal briefs submitted by Petitioners' (Hussey

Copper, Ltd.; The Miller Company; Olin Corporation; Revere Copper

Products, Inc.; International Association of Machinists and Aerospace

Workers; International Union, Allied Industrial Workers of America

(AFL-CIO); Mechanics Educational Society of America, and United

Steelworkers of America (AFL-CIO)) and by Wolverine, we have determined

that a dumping margin exists. For the reasons discussed below, we are

not revoking the order with respect to BSS from Canada manufactured by

Wolverine.

EFFECTIVE DATE: August 25, 1999.

FOR FURTHER INFORMATION CONTACT: Paige Rivas or James Terpstra, Office

of Antidumping/Countervailing Duty Enforcement, Office Four, Group II,

Import Administration, International Trade Administration, U.S.

Department of Commerce, 14th Street and Constitution Avenue, NW,

Washington, DC 20230; telephone: (202) 482-0651 or 482-3965,

respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise stated, all citations to the Tariff Act of 1930,

as amended (the Act) are references to the provisions effective January

1, 1995, the effective date of the amendments made to the Act by the

Uruguay Round Agreements Act (URAA). In addition, unless otherwise

indicated, all references to the Department's regulations are to 19 CFR

part 351 (1998).

Background

The Department published an antidumping duty order on BSS from

Canada on January 12, 1987 (52 FR 1217). On February 8, 1999, the

Department published in the Federal Register the preliminary results of

its administrative review of the antidumping duty order on BSS from

Canada (64 FR 6039) (preliminary results).

Immediately prior to the preliminary results, Petitioners raised a

number of issues with respect to Wolverine's questionnaire response

(Petitioners' letter of January 12, 1999). Some of these issues we were

able to consider for purposes of the preliminary results (see 64 FR at

6039-41/Further Developments Section). However, in order to address the

remaining issues we needed to collect additional information from

Wolverine in order to clarify the record. Thus, on February 23, 1999,

we issued a supplemental questionnaire to which Wolverine responded on

March 25, 1999. On April 12, 1999, Petitioners raised issues with this

reported information which necessitated an additional supplemental

questionnaire (April 18, 1999), to which Wolverine responded on April

30, 1999. On May 7, 1999, Petitioners raised issues with the

information in the April 30, 1999, response. As a result, we sought

further clarification in a supplemental questionnaire (May 14, 1999) to

which Wolverine responded on June 3, 1999. We gave interested parties

an opportunity to comment on our preliminary results. We received

written comments from Petitioners and Wolverine. No hearing was

requested.

Scope of Review

Imports covered by this review are shipments of BSS, other than

leaded and tinned BSS. The chemical composition of the covered products

is currently defined in the Copper Development Association (C.D.A.) 200

Series or the Unified Numbering System (U.N.S.) C2000. This review does

not cover products the chemical compositions of which are defined by

other C.D.A. or U.N.S. series. In physical dimensions, the products

covered by this review have a solid rectangular cross section over

0.006 inches (0.15 millimeters) through 0.188 inches (4.8 millimeters)

in finished thickness or gauge, regardless of width. Coiled, wound-on-

reels (traverse wound), and cut-to-length products are included. The

merchandise is currently classified under Harmonized Tariff Schedule

(HTS) item numbers 7409.21.00 and 7409.29.00. Although the HTS item

numbers are provided for convenience and customs purposes, the written

description of the scope of this order remains dispositive. In our

final affirmative determination of circumvention of the antidumping

duty order, covering the period September 1, 1990, through September

30, 1991, we determined that brass plate used in the production of BSS

falls within the scope of the antidumping duty order on BSS from

Canada. See Brass Sheet and Strip from Canada: Final Affirmative

Determination of Circumvention of Antidumping Duty Order, 58 FR 33610

(June 18, 1993).

Period of Review

The review period (POR) is January 1, 1997 through December 31,

1997. The review involves one manufacturer/exporter, Wolverine.

[[Page 46345]]

Normal Value Comparisons

To determine whether sales of subject merchandise from Canada to

the United States were made at less than normal value, we compared the

Export Price (EP) to the Normal Value (NV), as described in the

``Export Price'' and ``Normal Value'' sections of the preliminary

results of review notice (see preliminary results, 64 FR at 6039).

Therefore, in this proceeding, when making comparisons in accordance

with section 771(16) of the Act, we considered all products sold in the

home market as described in the ``Scope of Review'' section of this

notice, above, that were sold in the ordinary course of trade, for

purposes of determining appropriate product comparisons to U.S. sales.

Where there were no sales of identical merchandise in the home market

made in the ordinary course of trade to compare to U.S. sales, we

compared U.S. sales to sales of the most similar foreign like product

made in the ordinary course of trade, based on the characteristics

listed in Sections B and C of our antidumping questionnaire.

Revocation in Part

Under the Department's regulations, the Department may revoke an

order in part if the Secretary concludes that: (1) ``one or more

exporters or producers covered by the order have sold the merchandise

at not less than normal value for a period of at least three

consecutive years''; (2) ``[i]t is not likely that those persons will

in the future sell the subject merchandise at less than normal

value...''; and (3) ``the exporter or producer agrees in writing to its

immediate reinstatement in the order, as long as any exporter or

producer is subject to the order, if the Secretary concludes that the

exporter or producer, subsequent to the revocation, sold the subject

merchandise at less than normal value.'' See 19 CFR 351.222(b)(2).

Upon review of the three criteria described above, and of the case

briefs and rebuttal briefs, and on the basis of all of the evidence on

the record, we determine for the final results of this review that the

Department's requirements for revocation have not been met.

The Department found that Wolverine's sales reviewed during the

eighth (1994) and ninth (1995) administrative reviews under this order

were made at not less than NV. However, in the tenth (1996) and in this

current eleventh review, we determined that Wolverine's sales were made

at less than NV. Therefore, we are not revoking the antidumping duty

order with respect Wolverine. See Comment 1.

Changes Since the Preliminary Results

Since the preliminary results we have made the following changes in

our calculations. We recalculated Wolverine's reported warranty costs

on a customer-specific basis (see Comment 3). We added home market

indirect selling expenses to the COP calculation (see Comment 7). We

included in the margin calculation a sale made in 1996 but entered in

1998 (see Comment 8). We used temper as a matching criterion, as in

previous reviews of this product (see Comment 9). See also Analysis

Memo dated August 9, 1999, on file in the Central Records Unit (CRU),

located in Room B-099 of the main Commerce Department Building.

In addition, Wolverine, in response to post-preliminary

supplemental questionnaires, presented several revisions to its

reported information. We have accepted and used the following

revisions: 1) recalculated general and administrative (G&A) expenses

which accounted for certain one-time personnel related expenses (see

Comment 6); 2) revised allocation of foreign exchange gains and losses

to attribute the proper amounts to the reported cost information (see

Analysis Memo); 3) recalculated freight expenses (see Analysis Memo);

4) recalculated packing expenses (see Analysis Memo); 5) revised

interest expense which accounts for certain one-time debt-refinancing

arrangements (see Comment 10); and 6) recalculated credit expenses (see

Analysis Memo).

Analysis of Comments Received

Comment 1

Wolverine claims that the Department should revoke Wolverine from

the antidumping order for the following reasons: 1) the Department

found zero or de minimis dumping margins in the final results of the

administrative reviews of subject merchandise entered during calender

years 1994 and 1995, 2) Wolverine timely requested revocation from the

order during the administrative review covering entries during calender

year 1996, complied with all other prerequisites for requesting

revocation, and submitted evidence demonstrating that it was unlikely

that the Company would resume dumping if the antidumping order were

revoked, 3) the Department's position in litigation with respect to the

1996 review shows that Wolverine has de facto achieved de minimis or

zero dumping margins in the final results of three successive reviews,

4) the Department has issued preliminary results in the 1997 review

indicating de minimis margins for that review period, and 5) the

information regarding likelihood of resumption of dumping submitted in

the 1996 review, and used as the basis for its preliminary decision in

the instant review remains valid.

Petitioners state that Wolverine's request for revocation should be

denied for the following reasons: 1) regardless of the Department's

position before the NAFTA Panel with respect to the 1996 review, the

margin found in that review remains in effect, 2) correcting the errors

in Wolverine's sales and cost database will result in dumping margins

above de minimis in this review, and 3) dumping is likely to recur in

the future.

Department Position

We agree with Petitioners that Wolverine has not met the

requirements for revocation in this review. Because the litigation in

the 1996 review is not yet complete, the margin found in that review

remains in effect. In addition, we have determined that Wolverine was

dumping at an above de minimis rate during the 1997 POR. Because

Wolverine does not meet the requirements of 19 CFR 351.222(b)(2)(i),

Wolverine is not entitled to revocation in this review.

Comment 2

Petitioners claim that Wolverine incorrectly reported the width for

one of Wolverine's U.S. sales. Petitioners request that the Department

correct this error in Wolverine's U.S. sales database before making its

final margin analysis. Additionally, Petitioners contend that Wolverine

also failed to provide cost data for the product (i.e., control number)

sold pursuant to this invoice in its constructed value database.

Department Position

We agree with Petitioners that the width reported for this sale was

inaccurate, and have adjusted our calculation accordingly. However, we

disagree that the reported cost information is wrong and must be

rejected. Wolverine reported the cost for producing the merchandise

subject to this sale. That fact that the product code reported on the

sales list for this merchandise was incorrect with respect to the width

variable does not mean the reported cost for this merchandise is also

incorrect. Accordingly, we accepted the reported cost. (See also

Analysis Memo.)

Comment 3

Petitioners claim that Wolverine's reported U.S. warranty expense

is understated and must be corrected to include all relevant costs.

Petitioners state that warranty expenses should be

[[Page 46346]]

recalculated to include complete delivery costs for the returned goods.

According to Petitioners, the Department's supplemental questionnaire

directed Wolverine to include in its warranty expense value freight

costs and the cost of manufacture associated with restoring merchandise

returned under warranty. Petitioners claim that the reported warranty

expenses should include the delivery cost of the damaged merchandise,

as well as the return freight costs for this merchandise. Petitioners

also argue that the fabrication portion of the reported warranty

expense is understated because it only includes variable manufacturing

costs and excludes fixed manufacturing costs. In addition, Petitioners

argue that the Department erred by treating the reported direct

warranty expenses as being in Canadian dollars, rather than in U.S.

dollars. Finally, Petitioners generally contest the accuracy of the

fabrication portion of the reported warranty expenses.

Wolverine asserts that the Department should accept its warranty

cost data as submitted, because these costs are accurate and include

all appropriate expenses. Specifically, Wolverine states, the freight

cost for returned goods, plus the cost of fabricating returned

material, is included in its market-specific warranty expense, and

fixed manufacturing costs are properly excluded. Moreover, these costs

were reported in Canadian dollars, the currency in which the expenses

were incurred. According to Wolverine, Petitioners' criticisms

regarding the justifications for Wolverine's warranty expense are

unfounded. Wolverine rebuts Petitioners' assertion that warranty

expenses should be increased by an amount for fixed overhead, arguing

that the Department excludes such costs from its ``DIFMER'' analysis

and should exclude them from warranty costs as well. Wolverine also

argues that Petitioners' arguments with respect to the factual accuracy

of the fabrication portion of its warranty expenses were raised too

late in the proceeding and should not be considered.

Department Position

We agree with Petitioners that an adjustment to the margin

calculation is needed to properly deal with the cost of re-working the

defective merchandise; however, as explained below, this is not an

adjustment to warranty costs, for which the fabrication element of

warranty expense is already correctly reported. We also agree with

Wolverine that the total amount of warranty expense, which includes the

freight cost associated with returning defective merchandise and the

manufacturing costs associated with re-working such merchandise to make

it re-saleable, was accurately reported inclusive of all appropriate

costs and expenses, and was reported in Canadian dollars.

We disagree with petitioners' claim that the overall warranty cost

is understated because it does not include the cost of the outbound

freight to the customer. This expense was properly excluded from the

warranty expense. The outbound cost of freight on the transaction

associated with the warranty claim was incurred by Wolverine as a

freight cost outside of any warranty context, and therefore should

continue to be treated as freight cost, not a warranty cost, for that

sale. The reference to ``freight cost'' in the supplemental

questionnaire was to the freight costs incurred as a direct result of

the product defect associated with the warranty. Since in this case the

re-worked brass was not returned after re-working to the customer

filing the warranty claim, the only ``warranty'' freight was the cost

of returning the defective product to Wolverine.

With respect to the fabrication element of warranty costs, in other

words the cost of re-working the defective product so that it could be

re-sold, we do not agree with Wolverine's claim that these expenses

(which are now included in the reported warranty expense value) should

be excluded from the reported warranty expenses. These expenses are

clearly incurred as a direct result of the warranty claim, and thus

should be treated as warranty expenses. We do, however, agree with

Wolverine that double counting of these expenses must be avoided.

Because the manufacturing costs associated with re-working defective

merchandise reported for warranty expenses is part of the overall

reported cost of production/constructed value (COP/CV) data for the

POR, we need to make an adjustment to avoid double counting.

Accordingly, we reduced the reported COP/CV to account for any portion

of such costs associated with re-working defective merchandise returned

under warranty (see Analysis Memo).

Regarding petitioners' claim that the fabrication element of

Wolverine's overall warranty costs is understated because it includes

only labor and variable overhead, with no fixed overhead component, we

disagree. In calculating warranty expenses, the Department considers

only variable expenses, because the fixed expenses associated with

fabrication would, by definition, be incurred irrespective of the

warranty claims at issue. In this respect, warranty expenses are

similar to technical service expenses: any fixed portion of the cost at

issue, e.g., the salary of a technical service representative, would be

considered an indirect selling expense. Similarly, any fixed overhead

expenses which could be allocated to the cost of reworking the

defective merchandise would also be considered indirect expenses. In

addition, given the relatively minor amount of these costs, as compared

to the overall production expenses, the portion of fixed overhead

allocable to warranty expenses would be negligible and would have a de

minimis effect on the calculations. Accordingly, we made no adjustment

to direct warranty expenses for fixed overhead. See Analysis Memo.

With respect to the question of whether the warranty expenses

reported by Wolverine were stated in U.S. dollar or Canadian dollar

values, we agree with Wolverine that the reported values are Canadian

dollar values reported in that currency. Wolverine originally indicated

that it reported these expenses in U.S. dollars (August 14, 1998

questionnaire response, computer format sheet exhibit C1). Wolverine

subsequently realized its oversight, however, and reported that these

expenses were both incurred and reported in Canadian dollars (June 3,

1999 questionnaire response, at 2 and Exhibit 8 of Wolverine's December

28, 1998).

Finally, Petitioners attempt, in their case brief, to cast doubts

on the overall accuracy of the fabrication cost element of Wolverine's

warranty cost data, suggesting that Wolverine has not provided enough

support for the Department to be sure of the accuracy of these costs as

reported. We agree with Wolverine that these allegations are late, lack

substance, and are not supported by the record.

Comment 4

During this review, Wolverine allocated its POR warranty expenses

on U.S. and Canadian sales, respectively, over total quantity shipped

in each market. During this POR, Wolverine's total U.S. warranty

expense arose from a claim associated with a single defective brass

coil that was returned. Petitioners argue that, whenever possible,

warranty expenses must be allocated on a model-specific basis, or at a

minimum, on a customer-specific basis. Thus, Petitioners argue, because

it is possible to associate this warranty expense with the single

transaction at issue, and because the Department's practice is to seek

to allocate direct expenses such as warranties at a transaction-

specific or model-specific

[[Page 46347]]

level, the Department should allocate this entire warranty expense

either to the transaction at issue, or at least to the customer at

issue. Wolverine argues that its U.S. warranty expenses should be

allocated over total U.S. sales of subject merchandise, as currently

reported, because Wolverine sets its prices in consideration of its

average likelihood of defects. This is particularly true, Wolverine

asserts, because BSS is a mature commodity-like product which is not

highly customized, such that the defect rate tends to be generally

consistent, even though Wolverine cannot predict on which units

individual defects will occur. Wolverine also argues that, if the

Department were to reject the basis on which Wolverines has allocated

warranty expenses incurred during the POR, it should use the historical

3-year average warranty expense it reported.

Department Position

We disagree with Wolverine that the warranty expense should be

allocated over all U.S. sales of the subject merchandise. Once we

ascertained the correct total warranty expense we determined that these

expenses should be allocated on as a specific a basis as possible,

which in this case, for the reasons given below, is on a customer-

specific basis.

Where feasible, the Department normally considers actual or

historical warranty data on a model-by-model basis. See, e.g.,

questions B34 and C44 of the questionnaire sent to Wolverine on March

31, 1998. Because certain warranty expenses are direct selling

expenses, the Department asks respondents to associate these expenses

with the individual sales which gave rise to them, to the extent that

the company's record-keeping system permits them to do so. In some

instances, the company's record-keeping system does not track direct

expenses such as warranties to individual sales; in such cases, the

Department normally will accept an allocation of these expenses on as

specific a basis as possible, including a customer-specific basis. In

this case, Wolverine's records kept in the normal course of business

allow it to track warranty expenses on a more specific basis. (See

Analysis Memo.) In this review, Wolverine changed its practice and

allocated warranty expenses over all U.S. sales of subject merchandise.

(We also note that Wolverine made no mention of this change in practice

in the narrative portion of its questionnaire response, and gave no

reason for the change until petitioners challenged the allocation.)

Wolverine argues that, in negotiating sales prices (and including

in those prices an element for possible warranty expense) a

manufacturer takes into account the ``average likelihood'' of product

defects. Thus, Wolverine argues, the ``only logical basis'' for

allocating warranty expenses is the average warranty expense that it

has reported. This would be a more convincing argument had Wolverine

chosen to allocate its warranty expenses in this fashion earlier.

Furthermore, Wolverine has not argued that it was unforeseen that its

warranty expenses could be so concentrated. When a company produces

large products, such as coils of brass, it is clear that a single

damaged product can result in a significant warranty expense, and this

fact would be taken into consideration in setting prices. Despite this

fact, Wolverine's earlier warranty-reporting has been more specific.

Companies often track warranty expenses on a customer-specific

basis. This is because such expenses frequently tend to be clearly

identified with specific customers. It is the individual customer whose

warranty claims must be addressed. Producers and sellers have a

fundamental need to be familiar with and satisfy their customers' needs

in order to obtain repeat business. As a result, companies usually need

to keep accurate records to assure that customer complaints, including

but not limited to warranty expense claims, are dealt with. This gives

rise to the requirement for accurate, customer-specific, record

keeping. In addition, warranty expenses may, in fact, vary by customer.

This is based not only on the different mix of models sold to

individual customers, but also on differences in product applications,

delivery conditions (time, distance, and method), product tolerance

requirements individual customers specify as acceptable, and inspection

practices. Moreover, Wolverine changed its practice with regard to

warranty allocation and failed to identify or justify this change. In

light of the above factors we continued to allocate warranty expenses

on a customer-specific basis as we did in earlier review segments of

this proceeding. See Analysis Memo.

Finally, we have not followed Wolverine's suggestion that if we do

not accept its reported allocation of POR data, we use the historical

three year average warranty expense, because we have more accurate POR-

based data available. Average historical data are most commonly used in

situations in which POR-specific data are not available because the

product is one for which warranty claims may only be filed some years

after merchandise is sold or in which POR-specific data are for some

reason aberrational. Wolverine has not alleged that the warranty claim

at issue was aberrational.

Comment 5

Petitioners argue that Wolverine improperly allocated its U.S.

freight costs and thus, that Wolverine's U.S. freight costs for a small

number of sales for which transaction-specific costs are available

should be recalculated on a transaction-specific basis. Petitioners

assert that, rather than allocating its freight costs on the most

specific basis possible, as required by the Department's regulations,

Wolverine diluted the BSS freight costs incurred on subject merchandise

by allocating its freight costs, including those incurred on a

substantial volume of sales of non-subject merchandise, over all brass

sales. The result, Petitioners claim, was a significant reduction in

Wolverine's reported U.S. freight expense for subject merchandise.

Wolverine argues that the use of a transaction-specific method for

the sales in question would be distortive and that Wolverine's freight

costs reported for the POR are based on the same method that the

company has used in the past, and that the Department has accepted in

prior segments of this proceeding. Wolverine states that its reported

cost of freight reflects the average POR freight cost incurred to ship

all merchandise to the same customer at the same location. According to

Wolverine, this average reflects the delivery terms it negotiates with

each customer, which are based on Wolverine's assessment of the

delivery costs it will incur on sales of all products to an individual

customer. Moreover, Wolverine argues that its freight records are not

organized to allow freight costs to be easily attributed to specific

invoices.

Department Position

We disagree with Petitioners that the freight costs associated with

the particular sales in question should be re-calculated on a

transaction-specific basis. To avoid a ``cherry-picking'' approach to

price adjustments, the Department generally prefers to use a

transaction-specific expenses or a single allocation methodology to

quantify a given expense within a POR. As a consequence, while

transaction-specific data may be available for certain transactions,

the Department will not use the transaction-specific expenses when only

allocated expense data is available for other transactions. Although

the Department seeks to

[[Page 46348]]

obtain transaction-specific freight costs, the accounting records of

respondent companies are frequently not organized in a way that lends

itself to such reporting as a general matter. See, e.g., Brother

Industries, Ltd. v. United States, 540 F. Supp. 1341, 1363 (1982); see

also Antifriction Bearings (Other Than Tapered Roller Bearings) and

Parts Thereof From [various countries]; Final Results of Antidumping

Duty Administrative Reviews, 63 FR 33320, 33340 (June 18, 1998). As a

result, allocations of freight costs are common. As noted in this

review, and as verified in prior reviews, Wolverine's freight expenses

records are not organized in a manner that allows freight costs to be

attributed easily to individual transactions. For example, it is common

for a given Wolverine freight bill to cover multiple invoices and both

subject and non-subject merchandise. Therefore, the Department has in

the past determined that it is reasonable for Wolverine to calculate

the average freight costs to each customer, and then allocate this

amount over all sales to that customer. That is what Wolverine did in

this review. Moreover, Commerce also has verified in past reviews that

no distortion was introduced by allocating costs to ship both subject

and non-subject merchandise to the same customer, and there is no

indication on the record of this review of a change in that situation.

Comment 6

Petitioners argue that the Department should correct Wolverine's

G&A expense ratio: (1) based on the formula in the Department's

questionnaire, and (2) to reflect an ``even-handed and consistent

treatment'' for income and expenses. Petitioners assert that Wolverine

improperly excluded certain personnel costs in its calculation of G&A

expenses. According to Petitioners, the Department should calculate a

revised G&A expense ratio for Wolverine based on the total G&A expenses

reported by Wolverine at Attachment 12 of Wolverine's March 25, 1999

questionnaire response, and the total cost of sales shown in Wolverine

Tube Inc.''s 1997 financial statement.

Wolverine states that it reported G&A expense net of related income

items generated at the manufacturing subsidiary, in compliance with the

Department's questionnaire requirement. Wolverine contends that, in

calculating the G&A ratios, it also added a proportionate amount of G&A

expenses incurred at the corporate parent level that were not otherwise

reflected in the subsidiary's expenses. According to Wolverine, the

Department should use Wolverine's submitted G&A figures in its Final

Results.

Department Position

We agree with Wolverine that its G&A expenses were appropriately

reported. Contrary to Petitioners' assertion, Wolverine allocated an

appropriate portion of its corporate parent's G&A to the production of

subject merchandise. This allocation is typical of the kind we accept

in antidumping cases where the corporate parent incurs certain G&A

expenses on behalf of its subsidiary. See, e.g., Final Determination of

Sales at Less Than Fair Value: Welded Stainless Steel Pipe from

Malaysia: Final Result of Antidumping Review, 59 FR 4023, 4027 (January

28, 1994). See also Analysis Memo. We note that, based on issues raised

by Petitioners, we asked Wolverine to revise its reported G&A expenses

to include a portion of certain one-time charges which had not

originally been included in the reported costs. Wolverine complied with

this request in its March 30, 1999 questionnaire response. We have used

the G&A expenses revised in this manner for the final results of this

review.

Comment 7

Petitioners claim that the Department should include home market

indirect selling expenses in its cost test due to the fact that

Wolverine failed to report indirect selling expenses in its sales

database and the Department incorrectly excluded indirect selling

expenses from its cost test.

Wolverine agrees that the Department should add indirect selling

expenses to COP.

Department Position

We agree and have adjusted our calculations accordingly.

Comment 8

Wolverine claims that the Department erroneously excluded from the

1997 POR margin calculation one U.S. sale. This sale involved

merchandise that was sold prior to, but entered during, the POR.

According to Wolverine, the U.S. sale in question was confirmed in 1996

but the merchandise was shipped in 1997. Wolverine notes that under

section 751(a)(2)(A) of the Act, the Department is required to

determine the normal value and U.S. price of each entry of subject

merchandise made during the POR.

Petitioners did not comment on this issue.

Department Position

We have included this sale in our analysis. The Department's

practice with respect to sales prior to importation has been to examine

the sales of merchandise which entered the United States during the

POR.

Comment 9

Petitioners argue that the Department should continue to reject

Wolverine's original and revised temper codes. Petitioners state that

temper has not been viewed as an appropriate model match criterion in

the BSS proceedings generally, because it is not one of the primary or

essential characteristics of C.D.A. 200-series BSS, the subject

merchandise.

Wolverine claims that the Department must reject Petitioners' newly

submitted factual information with respect to the use of temper as a

product matching criterion (i.e., statements regarding whether or not

temper is ``generally identified in the industry'' as representing

``commercial reality''). Wolverine states that temper has been used by

the Department as a matching criterion in the last 3 completed reviews;

therefore, regardless of whether the Department accepts Petitioners'

``new factual information,'' temper should continue to be used as a

matching criterion. Finally, Wolverine notes that Petitioners have

reviewed this methodology in three prior reviews and have not

previously objected to the use of temper as a matching criterion in any

of those segments of the proceedings.

Department Position

We agree with Wolverine that temper is an appropriate matching

criterion. We did not use Wolverine's submitted temper codes in the

preliminary determination because its temper coding categories also

involved a different criterion ``finish.'' In response to our

supplemental questionnaire, however, Wolverine, has re-coded its

products as to temper to resolve this problem. We have used temper as a

matching criterion in previous reviews of this order. See, e.g., Brass

Sheet and Strip from Canada: Preliminary Results of Antidumping Duty

Preliminary Review; Review of Notice of Intent To Revoke Order in Part,

63 FR 6519, 6521 (February 9, 1998)((1996 review); Brass Sheet and

Strip from Canada; Results of Antidumping Duty Administrative Review,

61 FR 1560, 1561 (January 22, 1996)(1993 review). We have found that

temper is a measurable physical characteristic, which is recognized in

the marketplace, and which results in cost and price differences.

Moreover, we

[[Page 46349]]

disagree with Petitioners' claim that because temper was not used as a

matching criterion in the investigation it cannot be a relevant

criterion in this review. The Department may alter its approach over

different segments of a proceeding if the facts so warrant. In fact, it

is not uncommon for the Department to modify its approach through

different segments of a proceeding as it learns more about the product,

the industry, and the selling practices within that industry. Finally,

we do not agree that Petitioners' assertions and argument with respect

to the alleged ``commercial reality'' concerns as to temper codes rise

to the level of ``factual information.'' Thus, they need not be

excluded as ``new factual information.''

Comment 10

Petitioners argue that the Department should revise Wolverine's

interest expense ratio to include the costs that Wolverine incurred

during the POR to refinance and restructure its debt.

Wolverine states that the Department does not require that all

interest expenses incurred by a company in one year be included in COP

in the same year for antidumping analysis purposes, and that the

Department has allocated exchange gains and losses associated with

long-term debt over the remaining term of that debt, and not to the

year in which the exchange gain/loss occurred.

Department Position

We agree with Petitioner that Wolverine's interest expense ratio

should take these costs into account; however, we also agree with

Wolverine that the debt restructuring costs, which were originally

excluded from the reported costs, should be amortized over five years,

the term of the credit arrangement. Wolverine resubmitted its interest

cost incorporating this change and we have accepted it. See also

Analysis Memo.

Final Results of the Review

As a result of our comparison of EP to NV, we determine that a

dumping margin of 0.71 percent exists for Wolverine for the period

January 1, 1997 through December 31, 1997. We also determine not to

revoke in part the antidumping duty order with respect to imports of

subject merchandise from Wolverine.

Cash Deposit Instructions

The following deposit requirements will be effective upon

publication this notice of final results of administrative review for

all shipments of the subject merchandise from Canada that are entered,

or withdrawn from warehouse, for consumption on or after the

publication date as provided by section 751(a)(1) of the Act: (1) The

cash deposit rate for Wolverine will be the rate stated above; (2) if

the exporter is not a firm covered in this review, a prior review, or

the original less than fair value (LTFV) investigation, but the

manufacturer is, the cash deposit rate will be the rate established for

the most recent period for the manufacturer of the merchandise; (3) the

cash deposit rate for all other manufacturers or exporters will

continue to be rate, the ``all others'' rate established in the LTFV

investigation, and (4) for any previously reviewed exporter, the cash

deposit rate will be its company-specific rate established for the most

recent period. These deposit requirements, when imposed, shall remain

in effect until publication of the final results of the next

administrative review.

Assessment Instructions

The Department will determine, and the U.S. Customs Service shall

assess, antidumping duties on all entries subject to this review. For

assessment purposes, we have calculated importer-specific ad valorem

duty assessment rates for the merchandise based on the ratio of the

total amount of antidumping duties calculated for the examined entries

during the POR to the total quantity of sales examined corresponding to

such sales. The Department will issue appraisement instructions

directly to the Customs Service.

Notification of Interested Parties

This notice also serves as a final reminder to importers of their

responsibility under 19 CFR 351.402(f) to file a certificate regarding

the reimbursement of antidumping duties prior to liquidation of the

relevant entries during this review period. Failure to comply with this

requirement could result in the Secretary's presumption that

reimbursement of the antidumping duties occurred and the subsequent

assessment of double antidumping duties.

This notice also serves as a reminder to parties subject to

administrative protective orders (APOs) of their responsibility

concerning the disposition of proprietary information disclosed under

APO in accordance with 19 CFR 353.34(d)(1). Timely written notification

of the return/destruction of APO materials or conversion to judicial

protective order is hereby requested. Failure to comply with the

regulations and the terms of an APO is a sanctionable violation.

This administrative review and notice are in accordance with

sections 751(a)(1) and 777(i)(1) of the Act.

Dated: August 9, 1999.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 99-22087 Filed 8-24-99; 8:45 am]

BILLING CODE 3510-DS-P